Page last updated at 12:53 GMT, Thursday, 3 November 2011

UK 'well prepared' to deal with eurozone crisis

The UK is "well prepared for any eventuality" in the eurozone crisis, Financial Secretary to the Treasury Mark Hoban has told the Commons.

He was responding to an urgent question by Conservative Eurosceptic MP Peter Bone, who wanted to know what plans the government had in place "for when the euro collapses".

Mr Bone believed Greece - which has promised its people a referendum on the latest eurozone bail-out - should be allowed to exit the euro and take control of its currency.

Addressing the Commons on 3 November 2011, Mr Hoban said it was "vital" world leaders "commit to increased confidence in the global economy" at the G20 summit taking place in Cannes, and agree a detailed plan to tackle the crisis.

He reiterated the government's position that "there may well be a case" for increasing money available to the International Monetary Fund - but stressed this could not be used solely for a eurozone bailout.

Tory Bernard Jenkin, challenging the government's argument that there is a "remorseless logic" of greater fiscal union in the EU, warned such a move would lead to "economic dictatorship", and added: "It will fail and we better be planning for something else."

Liberal Democrat Stephen Williams believed a large number of Conservative MPs "will the destruction of the euro area". He asserted that this was not in the UK's economic or national interest.

Labour repeated its calls for an "immediate" plan for jobs and growth in the UK and across Europe, with shadow Treasury minister Chris Leslie claiming it was thanks to Labour that Britain had not joined the euro - prompting jeers from the Tory backbenches.

Mark Hoban refuted the claim, saying that a former Conservative government had secured an opt-out from Maastricht Treaty to ensure the country kept out of the single currency. He added that the coalition had, as soon as it came to office, abolished the euro preparation unit set up by Labour.

Labour MP Gisela Stuart called for a financial transaction tax to "get the eurozone out of this mess". Mr Hoban dismissed the idea, highlighting an EU impact assessment which suggested it would lead to lower employment and lower growth across Europe.

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